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Donald Trump’s stomping on trade brings home the risks for some U.S. farmers

U.S. farmers are realizing just how vulnerable they are, a relatively new realization for many who have wrongly believed American agriculture is domestically sustainable

An attendee displays an "I Support NAFTA" button for a photograph during the annual American Farm Bureau Federation conference in Nashville, Tennessee, U.S., on Monday, Jan. 8, 2018.Luke Sharrett/Bloomberg

Anita Mether farms in Idaho alongside her husband. They have decades of experience.

But during a session on the global commodities market at the Commodity Classic conference in Anaheim, Calif., in February, she learned something new.

I was sitting beside her as the presenter painted a clear and digestible picture of a global marketplace that lives and breathes and makes decisions — whether the U.S. is part of it or not.

At the end of it, Mrs. Mether gasped, turned to me and said, “Wow! I’d never thought of it that way before.”

I didn’t know anyone in the room. And while visibly surprised, she seemed happy and eager to engage with someone before the information became stale. The once disparate pieces suddenly fell into place. It was her eureka moment.

Suddenly, Mrs. Mether and the 8,000 or so others attending the flagship event had to deal with the bleak reality that the president many of them were responsible for electing was now dismantling, day by day, the structures that support agriculture in the U.S.

Donald Trump stomped on TPP and NAFTA appears to be next. These moves have exposed U.S. farmers to just how vulnerable they are to a global market, a relatively new realization for many who have wrongly believed that American agriculture is domestically sustainable.

When the U.S. speaks ill of China, China slashes its U.S. soy imports and instead looks to places such as Brazil and Canada.

Exiting TPP means tariffs on commodities exported to the involved countries will go up. And it’s the farmer who loses, as that price differential has to be made up somewhere and growers are price takers, not makers. An exit from NAFTA means higher levies on products from Mexico and Canada that the U.S. relies on and a likely reduction in the commodities Canada and Mexico imports.

No one enjoys feeling vulnerable.

I explained to Mrs. Mether that because Canada is about one tenth the size of the U.S., its farmers for the most part observe the global commodities market. We are aware of the soybean demands of a place like China and we’re sensitive to what it takes to keep our export markets strong and our export clients happy. It’s just part of our fabric.

This made sense to her.

Canadian farmers wouldn’t have reacted the same way to that presentation, but it would be naïve for any one of us to believe that there’s nothing for us to learn from Mrs. Mether’s reaction. While the U.S. farming community is collectively coming to the realization that it is and always has been beholden to a healthy export market, this had been their blind spot. What is ours?

Canada is a global leader in the pulse trade, and tariffs in India have hurt our farmers. Lentil acres will be down in Saskatchewan this year, as a result of India’s commitment to satisfy its high pulse demands domestically.

Perhaps Canada’s blind spot is its dependency on export. What would happen if we placed more of a priority on finding domestic uses for our agricultural products? It would require a change in how we view ourselves within a global market. It would require buy-in from our government.

Imagine how things could look 10, 15, 20 years from now if the Canadian government worked at creating a business-friendly environment for companies interested in building processing facilities, refineries, malting plants and other value-add infrastructure for the things we grow.

The pulse industry is urging Canadians to eat more beans, lentils, chickpeas and faba beans. But other commodities require some steps in order to bring them to your table. Canola is a great example. It’s grown, processed and consumed in Canada.

Soy could be a similar story. And the demand for barley malt is only growing, as the craft beer industry shows no signs of slowing. There is huge benefit to having the capability to add value to a raw commodity. The capital investment is high and the model needs to be sustainable, but it’s worth considering.

Electric cars were a silly idea decades before they were a smart one.

In an unpredictable global marketplace, having options is never a bad thing.